Maintaining Access

by Jodi Richards On Mar 8, 2005

EAU CLAIRE, WI-- With a recently received Small Community Air Service Development grant from the Department of Transportation, Chippewa Valley Regional Airport (EAU) here is one step closer to attracting a
second carrier. Airport manager, Jerome Thiele, C.M., says the goal is access to Milwaukee, a small hub some 240 miles southeast of this
northwestern Wisconsin region of nearly 200,000. "We need to have access to another hub," says Thiele.

EAU is currently served by Northwest Airlink, operated by Mesaba Airlines. Flights on Saab 800s carry passengers to and from Minneapolis/St. Paul International Airport, some 70 miles west.
According to Thiele, nearly 75 percent of Northwestern Wisconsin residents travel out of MSP as opposed to EAU, which is tremendous passenger leakage.

In 2004, EAU saw nearly 25,000 passengers pass through its doors, an increase of some 19 percent over 2003, says Thiele. He expects this number will continue to climb once the airport is able to offer service to another hub, such as General Mitchell International (MKE) in Milwaukee. Airport studies have indicated that a new airline could see some 7,000 passengers in the first year and 10,000 in the second. Thiele adds that this could be both new passengers, as well as those that were using the Mesaba service previously.

Air Service
Development Grant

The airport submitted a proposal in 2004 for a Small Community Air Service Development grant, a U.S. Department of Transportation program. The proposal asked for $500,000 to use as a revenue guarantee to attract Midwest Airlines. If successful in securing the airline, the service would likely be provided by Skyway Airlines, a subsidiary of the Milwaukee-based carrier. In addition, the three counties that own and govern EAU would contribute $100,000, as well as $65,000 joint-airport marketing funds to help ensure the carrier?s success in this market for one year.

In developing the proposal for the grant, Eau Claire worked with The Boyd Group. President of the Denver-based consulting firm Michael Boyd says the application was successful because "it offers solutions." Not only does it offer EAU the opportunity to improve air service, but also takes pressure off roadways when travelers, looking for better fares, drive to other, larger airports ? an attractive component to DOT. "It solves the challenge of getting Eau Claire to another hub ... and it's also a reasonable way to get to Chicago," Boyd adds.

In its proposal, the airport states that service to Milwaukee via Midwest Airlines will offer travelers an easy trip to another hub, as well as the ability to continue through the Chicago airports. A newly opened Amtrak rail station provides service from Milwaukee to downtown Chicago and Northern Illinois suburbs. Thiele says the intermodality of the airport's proposal played a tremendous role in receiving the grant. "Our proposal is the only one with a rail connection," he says.

While important to offer incentives to attract new carriers, Thiele is mindful of the existing carrier. "Mesaba is aware that we're looking for additional air service and we think it will be a win-win situation for the airport. We'll have new destinations and possibly a new level of service."

The airport board is offering a waiver of landing fees to any carrier at EAU that adds new service.
In addition to service from Mesaba, Eau Claire has been successful in attracting charter carriers, including Funjet, Sun Country,
and Casino Express to serve the Chippewa Valley, and Thiele expects more flights will be added in the coming years. The airport assists with marketing by holding open houses to promote the locations these charter operators serve, including Laughlin, Las Vegas, and Elko, Nevada.

Continued Growth

Thiele says that at the rate the airport is going in terms of planned improvements and enhancements, "We will have everything done by 2011." He credits the fiscal management of the airport board and funds from the State Aeronautics Board for being able to move forward with needed improvements in such a timely manner.

A $4 million control tower is under construction, and expected to be complete by August 2005 and fully functional by end of 2005. The control tower will be completed some $2 million under budget. EAU sees some 53,000 operations annually.

The airport board is currently conducting a finance study to explore the possibility building a new terminal south of the existing one. Thiele expects the 58,125-sq.ft. project could run some $23.5 million and would allow for updates to the current 31,810-sq.ft. facility as well as offer more check-in counter space, jet bridges, and room for the restaurant to expand. The ticket space EAU currently has is occupied solely by Mesaba. If another airline were to begin servicing the airport, Thiele says additional facilities may be necessary, depending on the needs of the airline. This will be the first major terminal update since 1981 and could begin as early as this year.

The Chippewa Valley region is growing, according to Thiele. He says there are some 5,000 hi-tech employees in the region, along with other corporations, that will need access to quality air service through EAU. He adds, "As the Twin Cities (Minneapolis/St. Paul) keep coming our direction, we will continue to see improvements across the airport."

The airport sits on some 1,100 acres, and, says Thiele, is currently working to acquire an additional 30. Roughly 80 percent of the airport property lies in Chippewa County, while the remaining 20 percent lies in Eau Claire County.

There are some 90 based aircraft at EAU and roughly 53,000 annual operations.

Menards, the third largest home improvement center in the United States, is based in Eau Claire, and is the airport's largest tenant. Other tenants include an FBO, Heartland Aviation; rental car outfits Hertz, Avis, Enterprise; as well as a restaurant, Connell's II. Some 95 percent of the business at Connell's II is from off-airport.

Three-County Consortium

Chippewa Valley Regional Airport is governed by a three-county operating agreement, established in January 1999, and now entering its second five-year term.

The airport commission consists of seven members. Each of the counties, Dunn, Chippewa, and Eau Claire, elects one member to the board, while the remaining four seats must be residents of Eau Claire or Chippewa County jointly appointed by the Eau Claire County and Chippewa County Board Chair and approved by their respective County Boards. Each member of the board is appointed for a two-year term.

The airfield was opened as a municipal airport in the early 1940s, says Jerome Thiele, airport director, and was owned by the city of Eau Claire. In the late 1970s, the city put the airport and operations of it out for bid. Eau Claire County was the only bidder to respond. In the early 1990s, the Eau Claire County Board of Supervisors created the Chippewa Valley Regional Airport Commission, which later entered into the tri-county agreement.

According to the ownership and operation agreement, "Eau Claire County and Chippewa County shall participate in the expense of operation and maintaining the airport on a prorata basis determined by comparing each county's equalized valuation for budgeting purposes to the total equalized valuation of both counties."

Beginning January 1, 2004, both Eau Claire and Chippewa counties will contribute base amounts equal to their 2003 contributions and then increase the base in each following year, 2005 through 2008, over the prior year by three percent. Dunn County contributes a predetermined amount, which will range from $2,500 in 2004 to $2,814 in 2008, the end of the second five-year agreement.

"We just about cover our operating costs," says Thiele, "and then we look to the tax subsidy." Administrative matters, including benefits, insurance, personnel, and managing the budget are handle by Eau Claire county. Thiele says there is also a provision in the agreement which states Chippewa County has the right to purchase one half of the airport for $1.